Selling Wine and Spirits to Pay Estate Taxes
How to sell part of a collection quickly while keeping records clean for the estate.
Quick Answer
Estate taxes often require liquid cash quickly. Selling wine assets is a smart way to raise funds without selling real estate.
- Identify high-value, liquid assets (Bordeaux, Burgundy, Scotch) first.
- Sell to a national buyer for immediate wire payment.
- Keep specific records of the sale for the IRS/tax authority.
- Do not consign if you need cash now—consignment takes months.
- Ensure the buyer pays the estate directly.
Liquidity vs. Maximizing Value
When paying estate taxes, timing is often critical. Consignment auctions may promise higher hammer prices but take 3-6 months to pay out. Direct sale offers immediate liquidity.
- Direct Sale: Payment in days. definite price. Good for immediate tax bills.
- Consignment: Payment in months. Price uncertain (market risk). Better if time is not an issue.
Tax Documentation
For tax purposes, the basis of the wine is usually 'stepped up' to the value at the date of death. Selling shortly after usually results in little to no capital gains tax for the estate, but verify with your CPA.
- Request a formal purchase invoice from the buyer.
- Ensure the 'Sold To' party is the licensed buyer.
- Record the date of transfer clearly.
Common Mistakes
Avoid these pitfalls when under pressure to pay taxes.
- Selling to friends for cash (creates tax reporting headaches).
- Under-documenting the inventory (leaves you open to audits).
- Waiting until the tax deadline is days away (limits your negotiating power).
What to Do Next
Get liquidity for the estate now.
- List the top 20% of bottles by value.
- Photograph the collection.
- Request an immediate buyout offer.
- Confirm wire instructions for the estate account.
What to Do Next
Ready to get an offer for your bottles? Submit photos and details through our form, or text photos directly if that is easier.
Frequently Asked Questions
Does the estate pay capital gains tax?
Typically, the cost basis is stepped up to fair market value at the date of death, minimizing capital gains if sold promptly. Consult a tax professional.
Can you pay the estate directly?
Yes, we can wire funds directly to the estate's bank account.
How fast is the process?
We can provide a quote in 24-48 hours and payment immediately upon receipt of goods.
Do I have to sell everything?
No, you can cherry-pick specific high-value items to sell to meet your tax liability.
What documentation do you provide?
We provide a detailed Purchase Order and Bill of Sale for your records.